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Item 1A. Risk Factors

2025-03-03 compared with 2024-02-29 · 244 added, 245 removed, 691 unchanged (41% of the section changed)

Any investment in shares of our Class A common stock, the BGC Group Notes, the BGC Partners Notes, or our other securities or those of BGC Partners involves risks and uncertainties.

An investment in shares of our Class A common stock, the BGC Group Notes, the BGC Partners Notes, or our other securities or those of BGC Partners involves risks and uncertainties, including the potential loss of all or a part of your investment.

The following are important risks and uncertainties that could affect our business, but we do not ascribe any particular likelihood or probability to them unless specifically indicated.

Before making an investment decision to purchase our securities or those of BGC Partners, you should carefully read and consider all of the risks and uncertainties described below, as well as other information included in this Annual Report on Form 10-K, including “Item 7–Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included herein.

Before making an investment decision to purchase our securities or those of BGC Partners, you should carefully read and consider all of the risks and uncertainties described below, as well as other information included in this Annual Report on Form 10-K, including Part II, Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes included herein.

The occurrence of any of the following risks or additional risks and uncertainties that are currently immaterial or unknown could materially and adversely affect our business, financial condition, liquidity, result of operations, cash flows or prospects.

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Uncertain market, economic, and geopolitical conditions have in the past adversely affected, and may in the future adversely affect, our business.

Such conditions and uncertainties include fluctuating levels of economic output, historic fluctuating interest rates and the impact on trading volumes, recently volatile interest and inflation rates, employment levels, consumer confidence levels, and fiscal and monetary policy.

The economic policies of the current and next administration and Congress, including potential changes in interest rates and existing tax rates as well as potential changes in these factors as a result of the upcoming U.S.

Presidential election may further change the regulatory and economic landscape.

Such conditions and uncertainties include varying levels of economic output, fluctuating interest rates and the impact on trading volumes, volatile inflation rates, employment levels, consumer confidence levels, and fiscal and monetary policy.

The legislative priorities and economic policies of the current presidential administration and Congress, including potential changes in interest rates and existing tax rates, may further change the regulatory and economic landscape.

These conditions may directly and indirectly impact a number of factors in the global markets that may have a positive or negative effect on our operating results, including the levels of trading, investing, and origination activity in the financial markets, the valuations of financial instruments, changes in interest rates, changes in benchmarks, changes in and uncertainty regarding laws and regulations, substantial fluctuations in volume and commissions on securities and derivatives transactions, the absolute and relative level of currency rates and the actual and the perceived quality of issuers, borrowers and investors.

For example, the

actions of the U.S.

Federal Reserve and international central banking authorities directly impact our cost of capital and may impact the value of financial instruments we hold.

In addition, changes in monetary policy may affect the credit quality of our customers.

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• volatile global interest rates;

• economic and geopolitical conditions and uncertainties in the United States, Europe, Asia and elsewhere in the world, including government deficits, debt and possible defaults, austerity measures, and changes in central bank and/or fiscal policies, including the level and timing of government debt issuances, purchases and outstanding amounts;

• the impact of elections and changes in government administrations or other political events, both in the U.S.

and globally, including resulting changes in government policies;

• economic and geopolitical conditions and uncertainties in the United States, Europe, Asia and elsewhere in the world, including government deficits, debt and possible defaults, austerity measures, tariffs and changes in central bank and/or fiscal policies, including the level and timing of government debt issuances, purchases and outstanding amounts;

• possible political turmoil with respect to the U.S.

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• the effect of Federal Reserve Board and other central banks’ monetary policies, increased capital requirements for banks and other financial institutions, and other regulatory requirements;

• terrorism, war and other armed hostilities, such as the wars in Ukraine and Israel and other ongoing conflicts and hostilities in the Middle East, and measures taken in response thereto, including sanctions imposed by governments and related countersanctions;

• the impact of short-term or prolonged U.S.

government shutdowns, elections or other political events;

• terrorism, war and other armed hostilities, including the conflict between Ukraine and Russia, conflicts in the Middle East and other ongoing or new conflicts in those or other regions, and measures taken in response thereto, including sanctions imposed by governments and related countersanctions;

• inflation and wavering institutional and consumer confidence levels in the economy;

• pandemics and other international health emergencies, including the combined impact of COVID-19 with the flu and other seasonal illnesses;

• new or increased tariffs imposed by the U.S.

and foreign governments and other factors driving trade uncertainty and inflationary pressures;

• changes to trade or immigration policies in the U.S.

and globally;

• disagreement over the federal budget, which has caused the U.S.

federal government to shut down or reduce funding for various initiatives for periods of time in recent years, and recent initiatives to reduce federal spending and headcount;

• pandemics and other international health emergencies;

• the availability of capital for borrowings and investments by our clients and their customers;

• the level and volatility of foreign currency exchange rates and trading in certain equity, debt and commodity markets;

• changes in regulations relating to margin and clearing capital requirements;

• the level and volatility of the difference between the yields on corporate securities and those on related benchmark securities;

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For these reasons, substantial decreases in trading volume, declining prices, and/or reduced spreads could have material adverse effects on our business, financial condition, results of operations and prospects.

Actions taken by central banks in major global economies, including with regards to interest rates, may have a material negative impact on our businesses.

In 2022 and 2023, in response to significant inflationary pressures and inflation rates in the U.S.

as well as in other countries in which we operate, the Federal Reserve in the U.S.

and other central banks in various countries raised interest rates, which, coupled with reduced government spending and volatility in financial markets, had the effect of further increasing economic uncertainty and heightening related risks, including global currency fluctuations.

While higher interest rates have had and are expected to continue to have a positive impact on our revenues, currency fluctuations have affected, and may continue to affect, the reported value of our assets, liabilities, and cash flows.

In 2024, the Federal Reserve in the U.S.

and other central banks began lowering interest rates and may continue to do so in the future.

If interest rates continue to lower, global FX volumes may slow or become muted, largely because low interest rates in most major economies may make carry-trade strategies less appealing for FX market participants, which may have a negative impact on our business.

Downgrades of sovereign credit ratings, sovereign debt crises, or a decrease in the integrity of capital markets may have material adverse effects on the financial markets and general economic conditions, as well as our businesses, financial condition, cash flows, results of operations and prospects.

Any further downgrades of the U.S.

sovereign credit rating by one or more of the major credit rating agencies could have material adverse effects on financial markets and economic conditions in the U.S.

Any downgrades of the U.S.

sovereign credit rating by one or more major credit rating agencies could have material adverse effects on financial markets and economic conditions in the U.S.

and throughout the world.

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The ultimate impacts of negative credit rating actions with respect to U.S.

government obligations, the ultimate impacts on global financial markets and our business, financial condition, cash flows, results of operations, and prospects are unpredictable and may not be immediately apparent.

Additionally, the negative impact on economic conditions and global financial markets from further sovereign debt concerns with respect to the U.K., the EU and/or its member states, Japan, China or other major economies could further adversely affect our businesses, financial condition, cash flows, results of operations and prospects.

Concerns about the sovereign debt of certain major economies have caused uncertainty and disruption for financial markets

globally, and continued uncertainties loom over the outcome of various governments’ financial support programs and the possibility that EU member states or other major economies may experience similar financial troubles.

Any further downgrades of the long-term sovereign credit rating of the U.S.

government obligations, on global financial markets and our business, financial condition, cash flows, results of operations, and prospects are unpredictable and may not be immediately apparent.

Additionally, the negative impact on economic conditions and global financial markets from further sovereign debt matters with respect to the U.K., the EU and/or its member states, Japan, China or other major economies could further adversely affect our businesses, financial condition, cash flows, results of operations and prospects.

Concerns about the sovereign debt of certain major economies have caused uncertainty and disruption for financial markets globally, and continued uncertainties loom over the outcome of various governments’ financial support programs and the possibility that EU member states or other major economies may experience similar financial troubles.

Any downgrades of the long-term sovereign credit rating of the U.S.

or additional sovereign debt crises in major economies could cause disruption and volatility of financial markets globally and have material adverse effects on our business, financial condition, results of operations and prospects.

Actions taken by governments in response to inflation rates may have a material impact on our business.

Both domestic and international markets have recently experienced significant inflationary pressures and inflation rates in the U.S., as well as in other countries in which we operate, are currently expected to continue at elevated levels for at least the near-term.

In response, the Federal Reserve in the U.S.

and other central banks in various countries have raised, and may again raise, interest rates in response to concerns about inflation, which, coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening related risks.

Interest rate increases or other government actions taken to reduce inflation could also result in recessionary pressures in many parts of the world.

Additionally, these actions have affected FX volumes around the world, causing currency fluctuations and rapid changes in valuations that may make certain strategies less appealing for FX market participants.

Risks Related to New Opportunities/Possible Transactions and Hires

If we are unable to identify and successfully exploit new product, service and market opportunities, including through hiring new brokers, salespeople, managers, technology professionals and other front-office personnel, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.

Because of significant competition in our market, our strategy is to broker more transactions, increase our share of existing markets and seek out new clients and markets through competitive or innovative new product offerings.

We may face enhanced risks as these efforts to expand our business result in our transacting with a broader array of clients and expose us to new products and services and markets.

Pursuing this strategy may also require significant management attention and hiring expense and potential costs and liability in any litigation or arbitration that may result.

Because of significant competition in our markets, our strategy is to execute more transactions, increase our share of existing markets and seek out new clients and markets through competitive or innovative new product offerings.

We may face enhanced risks as these efforts to expand our business result in transacting with a broader array of clients and expose us to new products, services and markets.

Pursuing this strategy may also require significant management attention, hiring expenses and potential costs and liabilities in any litigation or arbitration that may result.

We may not be able to attract new clients or brokers, salespeople, managers, technology professionals or other front-office personnel or successfully enter new markets.

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We may also face competition in our acquisition strategy or new business plans, and such competition may limit such opportunities.

We have explored and continue to explore a wide range of strategic alliances, new business initiatives, mergers, investments, acquisitions and joint ventures with other financial services companies that have interests in related businesses or other strategic opportunities.

We have explored and continue to explore a wide range of new business initiatives, mergers, investments, acquisitions and joint ventures with other financial services or other companies that have interests in related businesses or other strategic opportunities.

Such transactions may be necessary in order for us to enter into or develop new products or services or markets, as well as to strengthen our current ones.

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• the expansion of our cybersecurity processes to include new businesses, or the integration of the cybersecurity processes of acquired businesses, including internationally;

• increased focus on our Energy and Commodities business, including regulatory, financial, and operational risks associated with these initiatives;

• increased focus on our Energy, Commodities and Shipping business, including regulatory, financial, and operational risks associated with these initiatives;

• potential unfavorable reactions to our strategy by our customers, counterparties, employees and investors, or challenges to our strategy by our competitors;

• hiring, retaining and integrating personnel in the increasingly competitive marketplace for the most talented producers and managers;

• integrating administrative, operational, financial reporting, internal control, compliance, technology and other systems;

• increased scope, geographic diversity and complexity of our operations and, to the extent that we pursue opportunities internationally, exposure to political, economic, legal, regulatory, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization and/or foreign ownership restrictions, expropriation, price controls, capital controls, foreign currency fluctuations, regulatory and tax requirements, economic and/or political instability, geographic, time zone, language and cultural differences among personnel in different areas of the world, exchange controls and other restrictive government actions, as well as the outbreak of hostilities;

• integrating accounting and financial systems and accounting policies and the related risk of having to restate our historical financial statements;

• potential dependence upon, and exposure to liability, loss or reputational damage relating to systems, controls and personnel that are not under our control;

• addition of business lines in which we have not previously engaged;

• potential unfavorable reactions to our strategy by our customers, counterparties, employees, and investors, or challenges to our strategy by our competitors;

• addition of business lines in which we have not previously engaged and which we do not have experience operating;

• the upfront costs of building technology and establishing infrastructure to establish new business ventures;

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• reduction in availability of financing due to credit ratings downgrades or defaults by us, in connection with these activities;

• a significant increase in the level of our indebtedness and adverse effects on our Liquidity in order to generate cash resources that may be required to effect acquisitions;

• a significant increase in the level of our indebtedness in order to generate, and adverse effects on our liquidity upon the deployment of, cash resources that may be required to effect acquisitions;

• dilution resulting from any issuances of shares of our Class A common stock in connection with these activities;

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• the impact of any reduction in our asset base resulting from dispositions on our ability to obtain financing or the terms thereof;

• additional taxes or other fees or expenses associated with the risks described above;

• a lag in the realization of financial benefits from these transactions and arrangements.

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Any future growth will be partially dependent upon the continued availability of suitable transactional candidates, at favorable prices and valuations and upon advantageous terms and conditions, which may not be available to us, as well as sufficient liquidity to fund these transactions.

Future transactions and any necessary related financings also may involve significant transaction-related expenses, which include payment of break-up fees, assumption of liabilities, including compensation, severance, lease termination, and other restructuring costs, and transaction and deferred financing costs, among

Future transactions and any necessary related financings also may involve significant transaction-related expenses, which include payment of break-up fees, assumption of liabilities, including compensation, severance, lease termination and other restructuring costs, and transaction and deferred financing costs, among others.

In addition, there can be no assurance that such transactions will be accretive or generate favorable operating margins.

The success of these transactions will also be determined in part by the ongoing performance of the acquired companies and the acceptance of acquired employees of our equity-based compensation structure and other variables which may be different from the existing industry standards or practices at the acquired companies.

We will need to successfully manage the integration of recent and future acquisitions and future growth effectively.

We will need to successfully manage the integration of recent and future acquisitions and future growth opportunities effectively.

Such integration and additional growth may place a significant strain upon our management, administrative, operational, financial reporting, internal control and compliance infrastructure.

Our ability to grow depends upon our ability to successfully hire, train, supervise and manage additional employees, expand our management, administrative, operational, financial reporting, compliance and other control systems effectively, allocate our human resources optimally, maintain clear lines of communication between our transactional and management functions and our finance and accounting functions, and manage the pressure on our management, administrative, operational, financial reporting, compliance and other control infrastructure.

Additionally, managing future growth may be difficult due to new geographic locations, markets and business lines.

Additionally, managing future growth due to new geographic locations, markets and business lines may be difficult.

We may not realize, or it may take an extended period of time to realize, the full benefits that we anticipate from strategic alliances, acquisitions, joint ventures or other growth opportunities.

There can be no assurance that we will be able to accurately anticipate and respond to the changing demands we will face as we integrate recent future acquisitions and continue to expand our operations, and we may not be able to manage growth effectively or to achieve growth at all.

There can be no assurance that we will be able to accurately anticipate and respond to the changing demands we will face as we integrate recent or future acquisitions and continue to expand our operations, and we may not be able to manage growth effectively or to achieve growth at all.

From time to time, we may also seek to dispose of portions of our businesses, or otherwise reduce our ownership, each of which could materially affect our cash flows and results of operations.

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In addition, cryptocurrency markets experienced significant price fluctuations in recent years, and may continue to experience periods of extreme volatility again in the future.

Recently, several entities in the digital asset industry have been, and may continue to be negatively affected, including to the point of insolvency.

If such events impact our cryptocurrency offerings, we may experience material adverse effect on our business, financial condition, results of operations and prospects in the future.

the SEC, CFTC, state and federal agencies are reviewing virtual currency businesses and have and or may enact regulations that restrict business activities and or require additional licenses to conduct certain businesses.

While the SEC has recently approved the listing and trading of a number of spot bitcoin ETPs, existing and future regulations may negatively impact our ability to offer different products in different regions and/or negatively impact our ability to deal with certain customers depending on where they are located.

If licenses are required, it may take a considerable amount of time to obtain the necessary approvals from the respective regimes.

Historically, several entities in the digital asset industry have been, and may continue to be negatively affected, by such extreme volatility, including to the point of insolvency.

If such events impact our cryptocurrency offerings, we may experience material adverse effects on our business, financial condition, results of operations and prospects in the future.

In the U.S., the SEC, CFTC, state and federal agencies are reviewing virtual currency businesses and have or may enact regulations that restrict business activities and or require additional licenses to conduct certain businesses, and these regulations may be further affected by the policies of the current U.S.

presidential administration.

Domestically and internationally, existing and future regulations may negatively impact our ability to offer different products in different regions and/or negatively impact our ability to deal with certain customers depending on where they are located.

If further or new licenses are required, it may take a considerable amount of time to obtain the necessary approvals from the respective regimes.

Any of these factors could have a material adverse effect on our business, financial condition, results of operations and prospects in the future.

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We have debt, which could adversely affect our ability to raise additional capital and obtain or maintain favorable credit ratings, limit our ability to react to changes in the economy or our business, expose us to interest rate risk, and prevent us from meeting our obligations under our indebtedness.

Our indebtedness, which at December 31, 2023 was $1,183.5 million, may have important, adverse consequences to us and our investors, including:

Our indebtedness, which on December 31, 2024 was $1,337.5 million may have important, adverse consequences to us and our investors, including:

• it may limit our ability to borrow money, dispose of assets or sell equity to fund our working capital, capital expenditures, dividend payments, debt service, strategic initiatives or other obligations or purposes;

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Some of our borrowings will mature in the near future.

The BGC Group 3.750% Senior Notes and BGC Partners 3.750% Senior Notes each mature on October 1, 2024, and collectively have an outstanding aggregate principal amount of $300.0 million;

The BGC Group 4.375% Senior Notes and BGC Partners 4.375% Senior Notes each mature on December 15, 2025, and collectively have an outstanding aggregate principal amount of $300.0 million;

and the BGC Group 8.000% Senior Notes and the BGC Partners 8.000% Senior Notes each mature on May 25, 2028, and collectively have an outstanding aggregate principal amount of $350.0 million.

the BGC Group 8.000% Senior Notes and the BGC Partners 8.000% Senior Notes each mature on May 25, 2028, and collectively have an outstanding aggregate principal amount of $350.0 million;

and the BGC Group 6.600% Senior Notes mature on June 10, 2029, and have an outstanding aggregate principal amount of $500.0 million.

Our ability to meet our payment and other obligations under our debt depends on our ability to generate and maintain significant cash flow in the near future or to access alternate sources of liquidity.

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If we are unable to implement one or more of these alternatives, our cash flow may be significantly reduced, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We are dependent upon availability of adequate funding and liquidity to meet our clearing margin requirements, among other financial needs.

We are dependent upon the availability of adequate funding and liquidity to meet our clearing margin requirements, among other financial needs.

Clearing margin is the amount of cash, guarantees or similar collateral that we must provide or deposit with our third-party clearing organizations in support of our obligations under contractual clearing arrangements with these organizations.

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We have also relied on arrangements with Cantor to clear certain of our transactions under the clearing agreement we entered into with Cantor in November 2008, which was amended in June 2024.

Although we have historically been able to raise debt on acceptable terms, deterioration of the world’s credit markets could make it more difficult for us to

refinance or replace such indebtedness in a timely manner or on acceptable terms.

Although we have historically been able to raise debt on acceptable terms, deterioration of the world’s credit markets could make it more difficult for us to refinance or replace such indebtedness in a timely manner or on acceptable terms.

Further, if for any reason we need to raise additional funds, including in order to meet regulatory capital requirements and/or clearing margin requirements arising from growth in our brokerage business, to complete acquisitions or otherwise, we may not be able to obtain additional financing when needed.

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Upon a material default, unless such default were cured by us or waived by lenders in accordance with the Revolving Credit Agreement, the lenders under such agreement could elect to invoke various remedies under the agreement, including potentially accelerating the payment of unpaid principal and interest, terminating their commitments or, however unlikely, potentially forcing us into bankruptcy or liquidation.

In addition, a default or acceleration under such agreement could trigger a cross default under other agreements, including potential future debt arrangements.

Although we believe that our operating results will be more than sufficient to meet all of these obligations, including potential future indebtedness, no assurance can be given that our operating results will be sufficient to service our indebtedness or to fund all of our other expenditures or to obtain additional or replacement financing on a timely basis and on reasonable terms in order to meet these requirements when due.

In addition, a default or acceleration under such agreement could trigger a cross default under other agreements, including potential future debt arrangements or the BGC Group Notes and BGC Partners Notes.

No assurance can be given that our operating results will be sufficient to service our indebtedness or to fund all of our other expenditures or to obtain additional or replacement financing on a timely basis and on reasonable terms in order to meet these requirements when due.

Credit ratings downgrades could adversely affect our cost of capital and the availability of debt financing.

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Our acquisitions may require significant cash resources and may lead to a significant increase in the level of our indebtedness.

Future or pending acquisitions may require significant cash resources and lead to a significant increase in the level of our indebtedness.

We may enter into short- or long-term financing arrangements in connection with acquisitions which may occur from time to time.

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We may incur substantial additional debt in the future, some of which may be secured debt.

We are not restricted under the terms of our existing debt arrangements and instruments, including the indentures governing the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the indentures governing the BGC Partners senior notes, from incurring additional debt, securing existing or future debt (with certain exceptions, including to the extent already secured), recapitalizing our debt or taking a number of other actions that are not limited by the terms of our debt instruments that could have the effect of exacerbating the risks described herein.

Under the terms of our existing debt, we are permitted under certain circumstances to incur additional debt, grant liens on our assets to secure existing or future debt, recapitalize our debt or take a number of other actions that could have the effect of diminishing our ability to make payments on our debt when due.

To the extent that we borrow additional funds, the terms of such borrowings may include higher interest rates, more stringent financial covenants, change of control provisions, make-whole provisions or other terms that could have a material adverse effect on our business, financial condition, results of operations and prospects.

Risks Related to Our Senior Notes

We may not have the funds necessary to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a change of control triggering event as required by the indentures governing these notes.

Upon the occurrence of a “change of control triggering event” (as defined in the indentures governing the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, and the indentures governing the BGC Partners senior notes), unless we have exercised our right to redeem such notes, holders of the notes will have the right to require us to repurchase all or any part of their notes at a price in cash equal to 101% of the then-outstanding aggregate principal amount of the notes repurchased plus accrued and unpaid interest, if any.

There can be no assurance that we would have sufficient, readily available financial resources, or would be able to arrange financing, to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event.” A failure by us to repurchase the notes when required would result in an event of default with respect to the notes.

We may not have the funds necessary to repurchase the BGC Group 4.375% Senior Notes, the BGC Group 8.000% Senior Notes, the BGC Group 6.600% Senior Notes, or the outstanding BGC Partners Notes upon a change of control triggering event as required by the indentures governing these notes.

Upon the occurrence of a “change of control triggering event” (as defined in the indentures governing the BGC Group 4.375% Senior Notes, the BGC Group 8.000% Senior Notes, the BGC Group 6.600% Senior Notes, and the outstanding BGC Partners Notes), unless we have exercised our right to redeem such notes, holders of the notes will have the right to require us to repurchase all or any part of their notes at a price in cash equal to 101% of the then-outstanding aggregate principal amount of the notes repurchased plus accrued and unpaid interest, if any.

There can be no assurance that we would have sufficient, readily available financial resources, or would be able to arrange financing, to repurchase the BGC Group 4.375% Senior Notes, the BGC Group 8.000% Senior Notes, the BGC Group 6.600% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event.” A failure by us to repurchase the notes when required would result in an event of default with respect to the notes.

In addition, such failure may also constitute an event of default and result in the effective acceleration of the maturity of our other then-existing indebtedness.

The requirement to offer to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event” may delay or prevent an otherwise beneficial takeover attempt of us.

The requirement to offer to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event” may in certain circumstances delay or prevent a takeover of us and/or the removal of incumbent management that might otherwise be beneficial to investors in our Class A common stock.

The requirement to offer to repurchase the BGC Group 4.375% Senior Notes, the BGC Group 8.000% Senior Notes, the BGC Group 6.600% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event” may delay or prevent an otherwise beneficial takeover attempt of us.

The requirement to offer to repurchase the BGC Group 4.375% Senior Notes, the BGC Group 8.000% Senior Notes, the BGC Group 6.600% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event” may in certain circumstances delay or prevent a takeover of us and/or the removal of incumbent management that might otherwise be beneficial to investors in our Class A common stock.

Risks Related to the Geographic Locations of Our Business

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Because we derived approximately 34.5% and approximately 33.3% of our total revenues on a consolidated basis for the year ended December 31, 2024 from our operations in the U.K.

and the U.S., respectively, our business is exposed to adverse regulatory and competitive changes, economic downturns and changes in political conditions in these countries.

If we are unable to identify and successfully manage

or mitigate these risks, our business, financial condition, results of operations and prospects could be materially adversely affected.

and the U.S., respectively, our business is exposed particularly to adverse regulatory and competitive changes, economic downturns and changes in political conditions in these countries.

If we are unable to identify and successfully manage or mitigate these risks, our business, financial condition, results of operations and prospects could be materially adversely affected.

exit from the EU could materially adversely impact our customers, counterparties, business, financial condition, results of operations and prospects.

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As part of our ongoing Brexit strategy, ownership of BGC Madrid, Copenhagen and Frankfurt & GFI Paris, Madrid and Dublin branches was transferred to Aurel BGC SAS (a French-based operation and therefore based in the EU) in July 2020.

We have been generally increasing our footprint in the EU which includes the establishment of a new branch office of Aurel BGC SAS in Milan and a new office in Monaco under a new local Monaco subsidiary.

We have been generally increasing our footprint in the EU which includes the establishment of a branch office of Aurel BGC SAS in Milan and an office in Monaco under a local Monaco subsidiary.

Regardless of these and other mitigating measures, our European headquarters and largest operations are in London, and market access risks and uncertainties have had and could continue to have a material adverse effect on our customers, counterparties, business, financial condition, results of operations and prospects.

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We also control access to our proprietary technology and enter into confidentiality and invention assignment agreements with our employees and consultants and confidentiality agreements with other third parties.

Protecting our intellectual property rights is costly and time consuming.

Protecting our intellectual property rights is costly and time consuming, and our business may be materially adversely affected by resources and management attention expended on pursuing such protections.

Unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results.

We cannot ensure that our intellectual property rights are sufficient to protect our competitive advantages or that any particular patent, copyright or trademark is valid and enforceable, and all patents ultimately expire.

In addition, the laws of some foreign countries may not protect our intellectual property rights to the same extent as the laws in the U.S., or at all.

We also cannot ensure that all intellectual property rights are registrable in the U.S.

or elsewhere.

In addition, the laws of some foreign jurisdictions may not protect our intellectual property rights to the same extent as the laws in the United States, or at all.

We may also utilize third-party software licensed under “open source” licenses from time-to-time in connection with our business or product or service offerings.

Although we have taken steps to protect ourselves, use of such third-party software may restrict how we use or distribute our products or services, subject us to claims, or impair our intellectual property rights.

Any significant impairment of our intellectual property rights could harm our business or our ability to compete.

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Accordingly, we may face claims of infringement or other violations of intellectual property rights that could interfere with our ability to use intellectual property or technology that is material to our business.

In addition, restrictions on the distribution of some of the market data generated by our brokerage desks could limit the comprehensiveness and quality of the

data we are able to distribute or sell.

In addition, restrictions on the distribution of some of the market data generated by our brokerage desks could limit the comprehensiveness and quality of the data we are able to distribute or sell.

The number of such third-party claims may grow.

Our technologies may not be able to withstand such third-party claims or rights against their use.

We may have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the rights of others or defend against claims of infringement or invalidity.

Any such claims or litigation, whether successful or unsuccessful, could result in substantial costs, and the diversion of resources and the attention of management, any of which could materially negatively affect our business.

Responding to these claims could also require us to enter into royalty or licensing agreements with the third parties claiming infringement, stop selling or redesign affected products or services or pay damages on our own behalf or to satisfy indemnification commitments with our customers.

Such royalty or licensing agreements, if available, may not be available on terms acceptable to us, and may negatively affect our business, financial condition, results of operations and prospects.

If our licenses or services from third parties are terminated or adversely changed or amended or contain material defects or errors, or if any of these third parties were to cease doing business or if products or services offered by third parties were to contain material defects or errors, our ability to operate our business may be materially adversely affected.

We may have to rely on litigation or other adversarial proceedings to secure, defend or enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the rights of others or defend against claims of infringement or invalidity.

Additionally, third parties may claim that we have infringed upon their intellectual property rights.

Any such claims, proceedings or litigation, whether successful or unsuccessful, could result in substantial costs to us, and the diversion of resources and the attention of management, any of which could materially negatively affect our business.

Such claims, proceedings or litigation could also require us to enter into settlement, royalty or licensing agreements (including with third parties claiming such infringement), stop selling or redesign affected products or services, rebrand or restrict our products or services, pay damages or satisfy indemnification commitments with our customers.

Such settlement, royalty or licensing agreements, if any, may not be available on terms acceptable to us, and may negatively affect our business, financial condition, results of operations and prospects.

If our software licenses or services from third parties are terminated or adversely changed or amended or contain material defects or errors, or if any of these third parties were to cease doing business or if products or services offered by third parties that we rely upon were to contain material defects or errors, our ability to operate our business may be materially adversely affected.

We license databases, software and services from third parties, much of which is integral to our systems and our business.

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Since our customers use our technology, products and services for important aspects of their business and for financial transactions, any errors, defects, or disruptions in such technology, products and services or other performance problems with our technology, products and services could subject our customers to harm and hurt our reputation.

Malicious cyber-attacks and other adverse events could disrupt our business, result in the disclosure of confidential information, damage our reputation and cause losses or regulatory penalties.

Our businesses require us to process and monitor, on a daily basis, a very large number of transactions, many of which are highly complex, across numerous and diverse markets in many currencies.

Malicious cyber-attacks and other adverse events that affected our operational systems or infrastructure, or those of third parties, could disrupt our business, result in the disclosure of confidential information, damage our reputation and cause losses or regulatory penalties.

While we view cybersecurity as a top priority, developing and maintaining our operational systems and infrastructure is challenging, particularly as a result of rapidly evolving legal and regulatory requirements and technological shifts.

Our businesses require us to process and monitor, on a daily basis, a very large number of transactions, many of which are highly complex, across numerous and diverse markets and in many currencies.

Developing and maintaining our operational systems and infrastructure are challenging, particularly as a result of us and our clients entering into new businesses, jurisdictions and regulatory regimes, rapidly evolving legal and regulatory requirements and technological shifts.

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In addition, our operations rely on the secure processing, storage and transmission of confidential and other information on our computer systems and networks.

Although we take protective measures, such as software programs, firewalls and similar technology, to maintain the confidentiality, integrity and availability of our and our customers’

information, and endeavor to modify these protective measures as circumstances warrant, the nature of cyber threats continues to evolve.

As a result, our computer systems, software and networks may be vulnerable to unauthorized access, loss or destruction of data (including confidential customer information), account takeovers, unavailability or disruption of service, computer viruses, acts of vandalism, or other malicious code, ransomware, hacking, phishing and other cyber-attacks and other adverse events that could have an adverse security impact.

Although we take protective measures, such as software programs, firewalls and similar technology, to maintain the confidentiality, integrity and availability of our and our customers’ information, and endeavor to modify these protective measures as circumstances warrant, the nature of cyber threats continues to evolve.

As a result, our computer systems, software and networks may be vulnerable to unauthorized access, loss or destruction of data (including confidential customer information), account takeovers, unavailability or disruption of services, computer viruses, acts of vandalism, or other malicious code, ransomware, hacking, phishing and other cyber-attacks and other adverse events that could have an adverse security impact.

Additionally, we may be vulnerable to cybersecurity attacks utilizing emerging technologies, such as artificial intelligence.

Despite the defensive measures we have taken, these threats may come from external forces, such as governments, nation-state actors, organized crime, hackers, and other third parties, or may originate internally from within us.

Given the high volume of transactions involved in our business, certain errors may be repeated or compounded before they are discovered and rectified.

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Malicious actors may also attempt to compromise or induce our employees, clients or other users of our systems to disclose sensitive information or provide access to our data, and these types of risks may be difficult to detect or prevent.

Our financial, accounting, data processing or other operating and compliance systems and facilities may fail to operate properly or become disabled as a result of events that are wholly or partially beyond our control, such as a malicious cyber-attack or other adverse events, which may adversely affect our ability to provide services.

Any such cyber incidents involving our computer systems and networks, or those of third parties important to our business, could have a material adverse effect on our business, financial condition, results of operations and prospects.

There have been an increasing number of ransomware, hacking, phishing and other cyber-attacks in recent years in various industries, including ours, and cybersecurity risk management has been the subject of increasing focus by our regulators.

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are governed, respectively, by the GDPR in the EU and the equivalent Data Protection Act 2018 in the U.K.

We are subject compliance obligations in relation to such personal data and the possibility of significant financial penalties for non-compliance.

We are subject to compliance obligations in relation to such personal data and the possibility of significant financial penalties for non-compliance.

We are also subject to certain U.S.

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These laws and regulations are increasing in complexity and number.

In addition to

the increased cost of compliance, our failure to successfully implement or comply with appropriate processes to adhere to the GDPR and other laws and regulations relating to personal data could result in substantial financial penalties for non-compliance, expose us to litigation risk and harm our reputation.

The SEC recently adopted new rules that state that, as a public company, we are required to disclose certain of our processes that relate to cybersecurity and to disclose information relating to material cyber-attacks or other information security breaches.

We may use artificial intelligence in our business, and challenges with properly managing its use could result in competitive harm, regulatory action, legal liability and brand or reputational harm.

We are developing and may use artificial intelligence, including, without limitation, machine learning and generative artificial intelligence (collectively, “AI”) in our business and integrate AI into our platforms, products, offerings and services.

In addition to the increased cost of compliance, our failure to successfully implement or comply with appropriate processes to adhere to the GDPR and other laws and regulations relating to personal data could result in substantial financial penalties for non-compliance, expose us to litigation risk and harm our reputation.

We and our competitors may use artificial intelligence in our businesses, and challenges with properly managing its use could result in competitive harm, regulatory action, legal liability and brand or reputational harm.

We are developing and may use AI, including, without limitation, machine learning and generative AI in our business and integrate AI into our platforms, products, offerings and services.

Such use may present legal, regulatory and other challenges that could subject us to competitive harm, regulatory action, legal liability and brand or reputational harm.

If the output of any AI integrated into our platforms, products, offerings or services are or alleged to be deficient, inaccurate, infringing, violative of third-party rights or biased, our business, financial condition, and results of operations may be adversely affected.

Our efforts to utilize these technological advancements may not be successful, may result in substantial integration and maintenance costs, and may expose us to additional risks.

If the output of any AI integrated into our platforms, products, offerings or services are or are alleged to be deficient, inaccurate, infringing, violative of third-party rights or biased, our business, financial condition, and results of operations may be adversely affected.

The content, analyses, or recommendations generated by AI programs, if deficient, inaccurate, or biased, could adversely impact our business, financial condition, and operational results, as well as our reputation.

Moreover, ethical concerns associated with AI could lead to brand damage, competitive disadvantages, or legal repercussions.

Any problems with our implementation or use of AI or other technological advancements could negatively impact our business or results of our operations.

Our success and ability to remain competitive in the industry in which we operate requires adapting to technological developments and evolving industry standards, including in the field of AI.

Our competitors or other third parties may incorporate AI into their products or services more quickly or more successfully than us, which could make our products and services obsolete, impair our ability to compete effectively and adversely affect our business.

Moreover, use of third-party AI tools could lead to the inadvertent disclosure of confidential and proprietary information, which could put us at a competitive disadvantage and adversely affect our proprietary rights, business and financial condition.

As AI capabilities improve and are increasingly adopted, we may also become more vulnerable to cybersecurity attacks that use AI.

Such cybersecurity attacks could compromise our intellectual property and other sensitive information, be costly to remediate and cause significant damage to our business, reputation and operations.

Our vendors and third-party partners may incorporate AI without disclosing this use to us, and the providers may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit our or our vendors’ ability to maintain an adequate level of service and experience further exposing us to cybersecurity attacks and the loss of valuable property and information as well as adversely impact the public perception of the effectiveness of our security measures.

Risks Relating to Our Key Personnel and Employee Turnover

The loss of one or more of our key executives, the development of future talent and the ability of certain key employees to devote adequate time and attention to us are a key part of the success of our business, and failure to continue to employ and have the benefit of these executives may adversely affect our business and prospects.

Leadership changes and the resulting transition following Howard Lutnick’s confirmation as the U.S.

Secretary of Commerce could have an adverse effect on our business.

On February 18, 2025, Howard Lutnick was confirmed by the United States Senate as the 41st Secretary of Commerce.

Following his confirmation, Howard Lutnick stepped down as our Chairman of the Board and Chief Executive Officer, positions he has served in since 1999, and our Board appointed John Abularrage, JP Aubin, and Sean Windeatt as our Co-Chief Executive Officers.

While we have full confidence in our proven senior management team including our three Co-Chief Executive Officers, which are long-term and respected industry veterans, the loss of Howard Lutnick, as well as his deep institutional knowledge and industry relationships, as Chief Executive Officer and the resulting transition may be inherently difficult to manage and may hamper our ability to meet our financial and operational goals as we adapt to these changes, particularly in the short term.

Such changes may also result in added costs.

While we believe our new Co-CEOs have significant skills and longevity in the industry that will provide a strong transition, the loss of Howard Lutnick could result in initial disruptions to our operations and impact our ability to execute on our current strategy and pursue new strategic initiatives, which in turn could have an adverse effect on our business.

The loss of key employees or the failure to hire and retain highly skilled and other key personnel could negatively affect our business.

Our people are our most important resource.

We must retain the services of our key employees and strategically recruit and hire new talented employees to attract customer transactions.

Further, as we diversify into future business lines or geographic regions, hiring and engagement of effective management in these areas will impact our future success.

Further, as we diversify into future business lines or geographic regions, hiring and engagement of effective management in these areas will impact our success.

See “Item 1-Business-Human Capital Management.” If our retention efforts are not successful or our turnover rate increases in the future, our business, results of operations and financial condition could be materially adversely affected.

Effective succession planning is also important to our long-term success.

Failure to transition smoothly and effectively transfer knowledge to future executive officers and key employees could hinder our strategic planning and execution.

From time to time, senior management, outside directors or other key employees may leave our Company or be absent due to illness or other factors.

While we strive to reduce the negative impact of such changes, losing certain key employees could result in significant disruptions to our operations.

Hiring, training, and successfully integrating replacement critical personnel is time consuming and, if unsuccessful could disrupt our operations, and as a result could materially adversely affect our business, financial condition, results of operations and prospects.

Lutnick, who serves as our Chief Executive Officer and as Chairman of us and Executive Chairman of Newmark, is also the Chairman of the Board, President and Chief Executive Officer of Cantor and Chairman, Chief Executive Officer, President, director and sole shareholder of CFGM, the managing general partner of Cantor.

Merkel, our Executive Vice President and General Counsel, is employed as Executive Managing Director, General Counsel and Secretary of Cantor and Executive Vice President and Chief Legal Officer of Newmark.

In addition, Messrs.

Lutnick and Merkel also hold offices at various other affiliates of Cantor.

These key employees are not subject to employment agreements with us or any of our subsidiaries.

Currently, Mr.

Lutnick expects to spend approximately 50% of his working time and Mr.

Merkel expects to spend approximately 35% of his working time on our matters.

These percentages may vary depending on business developments, strategic initiatives or acquisition activity at us or Newmark or Cantor or any of our or their other affiliates, including SPACs.

As a result, these key employees dedicate only a portion of their professional efforts to our business and operations, and there is no contractual obligation for them to spend a specific amount of their time with us and/or Newmark or Cantor and their respective affiliates.

These key employees may not be able to dedicate adequate time and attention to our business and operations, and we could experience an adverse effect on our operations due to the demands placed on these members of our management team by their other professional obligations.

In addition, these key employees’ other responsibilities could cause conflicts of interest with us.

Lutnick or our other most senior executives leave or otherwise become unavailable to render services to us, their loss could disrupt our operations, adversely impact employee retention and morale, and seriously harm our business.

Failure to smoothly navigate current and future transitions among our senior management or to effectively transfer knowledge to future executive officers and key employees could hinder our strategic planning and execution.

From time to time, members of senior management, directors or other key employees may leave our Company or be absent due to illness or other factors.

While we strive to retain our key employees and to reduce the negative impact of such changes when they occur, losing certain key employees could result in significant disruptions to our operations, adversely impact employee retention, and seriously harm our business.

Similarly, hiring, training, and successfully integrating replacements for critical personnel is time consuming and, if unsuccessful, could disrupt our operations, and as a result could materially adversely affect our business, financial condition, results of operations and prospects.

The ability of key employees to devote adequate time and attention to us are a key part of the success of our business, and failure to continue to employ and have the benefit of these persons may adversely affect our business and prospects.

Certain officers and other key employees have positions with and obligations to Cantor, Newmark, or their respective affiliates, and may dedicate only a portion of their professional efforts to our business and operations.

There may be no contractual obligation for them to spend a specific amount of their time with us, Newmark or Cantor and their respective affiliates.

For example, Mr.

Merkel, the Chairman of our Board and our Executive Vice President and General Counsel, is employed as Executive Vice Chairman, Executive Managing Director, General Counsel and Secretary of Cantor and Executive Vice President and Chief Legal Officer of Newmark as well as Chairman of Newmark’s board of directors.

In addition, Mr.

Merkel also holds offices at various other affiliates of Cantor.

Merkel is not subject to employment agreements with us or any of our subsidiaries.

Merkel spent approximately 35% of his working time on our matters.

Merkel expects to spend approximately 35% of his working time on our matters in 2025.

This percentage may vary depending on business developments, strategic initiatives or acquisition activity at us or Newmark or Cantor or any of our or their other affiliates, including SPACs.

Merkel or certain other of our officers or key employees who have positions with and obligations to other entities may not be able to dedicate adequate time and attention to our business and operations, may be subject to conflicts of interest with us due to their other positions and obligations, and we could experience an adverse effect on our operations due to the demands placed on these persons by their other professional obligations.

We may be unable to enforce post-employment restrictive covenants applicable to our employees.

Certain of our key employees and officers are subject to post-employment restrictive covenants, including non-competition agreements, in connection with their employment agreements.

While we have had success in responding to challenges to certain of our non-compete provisions, there can be no assurance that our non-competition agreements will be found enforceable if challenged in certain states, including states that generally do not enforce post-employment restrictive covenants.

In 2023, the Federal Trade Commission proposed a rule that would render non-competition clauses unenforceable in certain situations, and is expected to vote on its proposed rule in April of this year.

If such a rule were passed (in any form) and upheld by the courts, it could have a material adverse impact on any applicable post-employment restrictive covenants currently in place.

Additionally, the Newmark Holdings limited partnership agreements, to the extent that our executive officers and employees continue to hold Newmark Holdings limited partnership units, which include non-competition and other arrangements applicable to our key employees who are limited partners of Newmark Holdings, may not prevent our key employees, including Messrs.

Lutnick and Merkel, whose employment by Cantor is not subject to these provisions in the limited partnership agreements, from resigning or competing against us.

In addition, our success has largely been dependent on the efforts of Mr.

Lutnick and other executive officers.

Should any of our key employees join an existing competitor, form a competing company, offer services to Cantor or any affiliates that compete with our products, services or otherwise leave us, some of our customers could choose to use the services of that competitor or another competitor instead of our services, which could adversely affect our revenues and as a result could materially adversely affect our business, financial condition, results of operations and prospects.

In 2024, the Federal Trade Commission enacted a rule, which is currently under legal challenge, that would render non-competition clauses unenforceable in certain situations.

If such a rule is upheld (in any form) by the courts, it could have a material adverse impact on any applicable post-employment restrictive covenants currently in place.

Risks Related to Internal Controls

If we fail to implement and maintain an effective internal control environment, our operations, reputation and stock price could suffer, we may need to restate our financial statements, and we may be delayed or prevented from accessing the capital markets.

As a public company, we are required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting.

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Similarly, we need to effectively manage any growth that we achieve in such a way as to ensure continuing compliance with all applicable control, financial reporting and legal and regulatory requirements.

Any material failure to ensure full compliance with control and financial reporting requirements could result in restatement of our financial statements, delay or prevent us from accessing the capital markets and harm our reputation and/or the market price for our Class A common stock.

Any material failure to ensure full compliance with control and financial reporting requirements, including as a result of acquisitions, could result in restatement of our financial statements, delay or prevent us from accessing the capital markets and harm our reputation and/or the market price for our Class A common stock.

Risks Related to Seasonality

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The financial services industry in general faces potential regulatory, litigation and/or criminal risks that may result in damages or fines or other penalties as well as costs, and we may face damage to our professional reputation and legal liability if our products and services are not regarded as satisfactory, our employees do not adhere to all applicable legal and professional standards, or for other reasons, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Many aspects of our current business involve substantial risks of liability.

Many aspects of our business involve substantial risks of liability.

In the normal course of business, we have been a party to investigations, administrative proceedings, lawsuits, arbitrations and other actions involving primarily claims for damages.

In certain circumstances, we could also face potential criminal investigations, enforcement actions or liability, including fines or other penalties.

Examinations, inspections, regulatory inquiries and subpoenas or other requests for information or testimony may cause us to incur significant expenses, including fees for legal representation and other professional advisors and costs associated with document production and remediation efforts.

Such regulatory, legal, or other actions may also be directed at certain executives or employees who may be critical to our business or to particular brokerage desks.

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A settlement of, or judgment related to, any such matters could result in regulatory, civil or criminal liability, fines, penalties, restrictions or limitations on our operations and activities and other sanctions and could otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.

Any such action could also cause us significant reputational harm, which, in turn, could seriously harm us.

Any such action could also cause us significant reputational harm, which, in turn, could seriously harm our business.

In addition, regardless of the outcome of such matters, we may incur significant legal and other costs, including substantial management time, dealing with such matters, even if we are not a party to the litigation or a target of the inquiry.

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It is not always possible to deter and detect employee misconduct or fraud.

While we have various supervisory systems and compliance processes and procedures in place, and seek to mitigate applicable risks, the precautions we take to deter and detect and prevent this activity may not be effective in all cases.

While we have various supervisory systems and compliance processes and procedures in place, and seek to mitigate applicable risks, the precautions we take to deter, detect and prevent this activity may not be effective in all cases.

As a result, if our customers are not satisfied with our products or services, or our employees do not adhere to all applicable legal and professional standards, such matters may be more damaging to our business than to other types of businesses.

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In the U.S., the SEC, FINRA, the CFTC, the NFA and various other regulatory bodies have stringent provisions with respect to capital applicable to the operation of brokerage firms, which vary depending upon the nature and extent of these entities’ activities.

Four of our subsidiaries, BGCF, GFI Securities LLC, Fenics Execution LLC and Mint Brokers are registered with the SEC and subject to the Uniform Net Capital Requirements.

Four of our subsidiaries, BGCF, GFI Securities LLC, FMX Execution LLC, and Mint Brokers are registered with the SEC and subject to the Uniform Net Capital Requirements.

As an FCM, Mint Brokers is also subject to CFTC capital requirements.

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These entities are subject to SEC, FINRA, CFTC and NFA net capital requirements.

In addition, our SEFs, BGC Derivative Markets and GFI Swaps Exchange, are required to maintain financial resources to cover operating costs for at least one year, keeping at least enough cash or highly liquid securities to cover six months’ operating costs.

In addition, our SEFs, BGC Derivative Markets and GFI Swaps Exchange LLC, are required to maintain financial resources to cover operating costs for at least one year, keeping at least enough cash or highly liquid securities to cover six months’ operating costs.

On January 22, 2024, FMX received approval from the CFTC to operate an exchange for U.S.

Treasury and SOFR futures.

The launch and operation of FMX may continue to require regulatory approval which could subject us to additional costs or obstacles.

On September 23, 2024, FMX Futures Exchange launched the trading of SOFR futures.

The ongoing operation of FMX may require further regulatory approval and be subject to regulatory oversight, which could subject us to additional costs or obstacles.

The failure of FMX to receive any required regulatory approvals to operate may adversely affect our business.

Our international operations are also subject to capital requirements in their local jurisdiction.

BGC Brokers L.P., GFI Brokers Limited, and GFI Securities Limited, which are based in the U.K., are currently subject to solo capital requirements established by the FCA’s Investment Firm Prudential Regime.

In addition, BGC European Holdings L.P.is subject to the FCA’s consolidated capital requirements.

In addition, BGC European Holdings L.P.

is subject to the FCA’s consolidated capital requirements.

The capital requirements of our French entities (and their EU branches) are predominantly set by the ACPR and AMF.

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Failure to adhere to these policies, controls and procedures may result in regulatory sanctions or customer claims.

Even after the award of permanent registration status to our SEFs, we will incur significant additional costs, our revenues may be lower than in the past and our financial condition and results of operations may be materially adversely affected by future events.

Even after the award of permanent registration status to our SEFs, we will incur significant additional costs operating certain of our swap execution facilities, our revenues may be lower than in the past and our financial condition and results of operations may be materially adversely affected by future events.

The Dodd-Frank Act mandated that certain cleared swaps (subject to an exemption from the clearing requirement) trade on either a SEF or DCM.

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While these principles may or may not be permanently enforced, we do know that we will be subject to a more complex regulatory framework going forward, and that there will be significant costs to prepare for and to comply with these ongoing regulatory requirements and potential amendments.

We will incur increased legal fees,

personnel expenses, and other costs, as we work to analyze and implement the necessary legal structure for full compliance with all applicable regulations.

We will incur increased legal fees, personnel expenses, and other costs, as we work to analyze and implement the necessary legal structure for full compliance with all applicable regulations.

There will also be significant costs related to the development, operation and enhancement of our technology relating to trade execution, trade reporting, surveillance, compliance and back-up and disaster recovery plans designed to meet the requirements of the regulators.

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and promote consistency between proposed Regulation SE and existing rules under the Exchange Act.

In August 2024, GFI Swaps Exchange LLC submitted an application to the SEC to become an SEC registered SEF.

In addition, on behalf of a number of our foreign platforms, we have requested an exemption from registration as an SEC SEF.

The exemptive relief is pending approval by the SEC.

On January 29, 2025 the SEC approved GFI Swaps Exchange LLC’s application and the firm’s registration is effective on February 28, 2025.

While we continue to have a compliance framework in place to comply with both CFTC and SEC rules and regulations, it is possible that the existing regulatory framework may be amended, which amendments could have a positive or negative impact on our business, financial condition, results of operations and prospects.

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This would have a broad impact on us and could have a material adverse effect on our business’ financial condition, results operations, and prospects.

Our energy and commodities activities, including those related to environmental and emission, power, oil, and natural gas products, subject us to extensive regulation, potential catastrophic events and other risks that may result in our incurring significant costs and liabilities.

Our energy, commodities and shipping activities, including those related to environmental and emission, power, oil, and natural gas products, subject us to extensive regulation, potential catastrophic events and other risks that may result in our incurring significant costs and liabilities.

We engage in the brokerage of a wide range of energy and commodities products, including environmental and emission, power, oil, and natural gas products.

We also provide brokerage services associated with the shipping of certain energy and commodities products.

These activities subject us and our customers to extensive regulatory oversight, involving federal, state, and local and foreign commodities, energy, environmental, and other governmental laws, and regulations and may result in significant costs and liabilities.

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The occurrence of any of such events may prevent us from performing under our agreements with customers, may impair our operations, and may result in litigation, regulatory action, negative publicity or other reputational harm, which could have a material negative effect on our business, financial condition, results of operations and prospects.

Our business, financial condition, results of operations and prospects could be materially adversely affected by new laws, rules, or regulations or by changes in existing law, rules or regulations or the application thereof.

Our business, financial condition, results of operations and prospects could be materially adversely affected by new laws, rules, or regulations, by changes in existing law, rules or regulations or the application thereof or by disagreements with regulatory agencies regarding the application of such laws, rules or regulations.

The financial services industry, in general, is heavily regulated.

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Changes in legislation and in the rules and regulations promulgated by the SEC, FINRA, the CFTC, the NFA, the U.S.

of operation and profitability of brokerages and could result in restrictions in the way we conduct our business.

Treasury, the FCA, the European Commission, ESMA and other domestic and international regulators and self-regulatory organizations, as well as changes in the interpretation or enforcement of existing laws and rules, often directly affect the method of operation and profitability of brokerages and could result in restrictions in the way we conduct our business.

For example, the U.S.

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In the U.S., the SEC has proposed rules to expand Regulation ATS to cover ATS trading government securities.

In addition, the proposed rules extend Regulation SCI to ATSs trading government securities.

Further, the authorities of non-U.S.

countries in which we have offices or do business may from time-to-time institute changes to tax law that, if applicable to us, could have a material adverse effect on our business, financial condition, results of operations and prospects.

Similarly, the U.S.

has proposed a series of changes to U.S.

tax law, some of which could apply to us.

It is not possible to predict if any of these new provisions will be enacted or, if they are, what form they may take.

It is possible that one or more of such provisions could negatively impact our costs and our effective tax rate, which would affect our after-tax earnings.

If any of such changes to tax law were implemented and/or deemed to apply to us, they could have a material adverse effect on our business, financial condition, results of operations and prospects, including on our ability to attract, compensate and retain brokers, salespeople, managers, technology professionals and other front-office personnel.

In addition, the proposed rules extend Regulation SCI to ATS trading government securities.

While we continue to have a compliance framework in place to comply with both existing and proposed rules and regulations, it is possible that the existing regulatory framework may be amended, which amendments could have a positive or negative impact on our business, financial condition, results of operations and prospects.

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Any such action could affect us in substantial and unpredictable ways and could have a material adverse effect on our businesses, financial condition, results of operations and prospects.

In addition, we are subject to tax risks inherent in operating a global business in various jurisdictions, including increased taxes and levies and future changes in income tax regulations.

Changes in our tax rates, unavailability of certain tax credits or reliefs, exposure to additional tax liabilities or assessments or challenges to our tax positions or interpretations could adversely affect our results of operations and financial condition.

We are subject to tax risks inherent in operating a global business in various jurisdictions, including increased taxes and levies and future changes in income tax regulations.

The authorities of countries in which we have offices or do business may from time-to-time institute changes to tax law that, if applicable to us, could have a material adverse effect on our business, financial condition, results of operations and prospects.

Similarly, the current presidential administration has outlined a series of proposed changes to U.S.

tax law, some of which could apply to us.

It is not possible to predict if any of these new provisions will be enacted or, if they are, what form they may take.

It is possible that one or more of such provisions could negatively impact our costs and our effective tax rate, which would affect our after-tax earnings.

Similarly, our tax positions and interpretations of the application of tax laws, including to our business and to our structure and those of our subsidiaries, have been challenged in the past and may be challenged in the future.

If we are unable to successfully address any such challenge, it could have a material adverse effect on our business, financial condition, results of operations and prospects.

Extensive regulation of our business restricts and limits our operations and activities and results in ongoing exposure to potential significant costs and penalties, including fines, sanctions, enhanced oversight, increased financial and capital requirements, and additional restrictions or limitations on our ability to conduct or grow our business.

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government agencies and self-regulatory organizations, as well as state securities commissions in the U.S., are empowered to bring enforcement actions and to conduct administrative proceedings and examinations, inspections, and investigations, which may result in costs, penalties, fines, enhanced oversight, increased financial and capital requirements, restrictions or limitations, and censure, suspension or expulsion.

Self-regulatory organizations such as FINRA and the NFA, along with statutory bodies such as the SEC, the CFTC, and the FCA, and other international regulators, require strict compliance with their rules and regulations.

Self-regulatory organizations, such as FINRA and the NFA, along with statutory bodies such as the SEC and the CFTC, and the FCA and other international regulators, require strict compliance with their rules and regulations.

Firms in the financial services industry, including us, have experienced increased scrutiny in recent years, and penalties, fines and other sanctions sought by regulatory authorities, including the SEC, the CFTC, FINRA, the NFA, state securities commissions and state attorneys general in the U.S., and the FCA in the U.K.

and other international regulators, have

increased accordingly.

and other international regulators have increased accordingly.

This trend toward a heightened regulatory and enforcement environment can be expected to continue for the foreseeable future, and this environment may create uncertainty.

From time-to-time, we have been and are subject to periodic examinations, inspections and investigations, including periodic risk assessment and related reviews of our U.K.

As a result of such reviews, we have been and may be subject to increased monitoring and be required to include or enhance certain regulatory structures and frameworks in our operating procedures, systems, and controls.

As a result of such reviews, we have been and may in the future be subject to increased monitoring (including in relation to matters unrelated to our activities in the financial services industry) and be required to include or enhance certain regulatory structures and frameworks in our operating procedures, systems, and controls.

Increasingly, the FCA has developed a practice of requiring senior officers of regulated firms to provide individual attestations or undertakings as to the status of the firm’s control environment, compliance with specific rules and regulations or the completion of required tasks.

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Competition for talent is intense, especially for brokers with experience in the specialized businesses in which we participate or may seek to enter.

If we are unable to hire or retain highly qualified professionals, including retaining those employed by businesses we acquire in the future, we may not be able to enter new brokerage markets or develop new products or services.

If we lose key brokers in a particular market in which we participate, our revenues may decrease, and we may lose market share.

In addition, recruitment and retention of qualified professionals could result in substantial additional costs, including costs and management time associated with litigation, arbitration or other claims related to employee hires and/or departures.

If we fail to attract new personnel, or fail to retain and motivate our current personnel, or if we incur increased costs or restrictions associated with attracting and retaining personnel (such as lawsuits, arbitrations, sign-on or guaranteed bonuses or forgivable loans), our business, financial condition, results of operations and prospects could be materially adversely affected.

We face strong competition from brokerages, exchanges, and other financial services firms, many of which have greater market presence, marketing capabilities and financial, technological and personnel resources than we have, which could lead to pricing pressures that could adversely impact our revenues and as a result could materially adversely affect our business, financial condition, results of operations and prospects.

We face strong competition from brokerages, trading platforms, exchanges, and other financial services firms, many of which have greater market presence, marketing capabilities and financial, technological and personnel resources than we have, which could lead to pricing pressures that could adversely impact our revenues and as a result could materially adversely affect our business, financial condition, results of operations and prospects.

The financial services industry is intensely competitive and is expected to remain so.

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Other inter-dealer broker and financial intermediary competitors include a number of smaller, privately held firms that tend to specialize in specific products and services or geographic areas.

We also compete with companies that provide alternative products and services, such as contracts traded on futures exchanges, and trading processes, such as the direct dealer-to-dealer market for government securities and stock exchange markets for corporate equities, debt and other securities.

We increasingly compete, directly or indirectly, with exchanges for the execution of trades in certain products, mainly in derivatives such as futures, swaps, options, and options on futures, such as the platforms operated by the CME Group and we will compete directly with the CME Group following the active launch of our FMX Futures Exchange.

We also compete with companies that provide alternative products and services, such as contracts traded on futures exchanges, and trading processes, such as the direct dealer-to-dealer market for government securities and exchange markets for corporate equities, debt and other securities.

We increasingly compete, directly or indirectly, with exchanges for the execution of trades in certain products, mainly in fixed income products and derivatives, such as futures, swaps, options, and options on futures, such as the platforms operated by the CME Group.

We also directly compete with the CME Group through our FMX Futures Exchange.

Certain exchanges have made and will likely continue to make attempts to move certain OTC-traded products to exchange-based execution, or to create listed derivatives products that mimic the qualities of similar OTC-traded products.

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We may compete in OTC-traded products with platforms, such as those owned by MarketAxess Holdings Inc.

and Tradeweb Markets, in fixed income products or various OTC FX platforms owned by exchanges such as CBOE and Deutsche Börse.

financial data and information firms such as LSEG Data & Analytics and Bloomberg L.P.

and Tradeweb Markets, in fixed income products or various OTC FX platforms owned by exchanges such as CME, CBOE and Deutsche Börse.

In addition, financial data and information firms such as LSEG Data & Analytics and Bloomberg L.P.

operate trading platforms for both OTC and listed products and may attempt to compete with us for trade execution in the future.

We also increasingly compete with a number of ECS brokerage firms, such as Marex Group PLC, as we continue to invest in the growth of this asset class.

Some of our competitors have greater market presence, marketing capabilities and financial, technological and personnel resources than we have and, as a result, our competitors may be able to:

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Consolidation and concentration of market share in the banking, brokerage, exchange and financial services industries could materially adversely affect our business, financial condition, results of operations and prospects because we may not be able to compete successfully.

In recent years, there has been substantial consolidation and concentration of market share among companies in the banking, brokerage, exchange, and financial services industries, resulting in increasingly large existing and potential competitors, and increased concentration in markets dominated by some of our largest customers.

Over time, there has been substantial consolidation and concentration of market share among companies in the banking, brokerage, exchange, and financial services industries, resulting in increasingly large existing and potential competitors, and increased concentration in markets dominated by some of our largest customers.

In addition, some of our large broker-dealer customers have reduced their sales and trading business in fixed income, currency, and commodities.

The combination of this consolidation and concentration of market share and the reduction by large customers of certain businesses may lead to increased concentration among our brokerage customers, which may reduce our ability to negotiate pricing and other matters with our customers and lower volumes.

Additionally, the sales and trading global revenue market share has generally become more concentrated over the past five years among five of the top investment banks across equities, fixed income, currencies, and commodities.

Additionally, the sales and trading global revenue market share has generally become more concentrated over the past several years among the top investment banks across equities, fixed income, currencies, and commodities.

We also face existing and potential competition from large exchanges, which seek or may seek to migrate trading from the inter-dealer market to their own platform.

Consolidation and concentration of market share are occurring in this area as well.

From 2017 to 2021, for example, we saw consolidation and increased competition from several of our competitors, such as Tradeweb’s acquisition of Nasdaq’s U.S.

fixed income trading platform (formerly known as eSpeed and owned by us) and TP ICAP’s acquisition of Liquidnet.

Consolidation among exchanges may increase their financial resources and ability to compete with us.

Continued consolidation and concentration of market share in the financial services industry and especially among our customers could lead to the exertion of additional pricing pressure by our customers, impacting the commissions and spreads we generate from our brokerage services.

Further, the consolidation and concentration among exchanges, and expansion by these exchanges into derivative and other non-equity trading markets, will increase competition for customer trades and place

additional pricing pressure on commissions and spreads.

These developments have increased competition from firms with potentially greater access to capital resources than we have.

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We are subject to various risks inherent in doing business in the international financial markets, in addition to those unique to the regulated brokerage industry.

We currently provide products and services to customers in many foreign countries, and we may seek to further expand our operations into additional jurisdictions.

We currently provide products and services to customers in many foreign countries, and may seek to expand our operations into additional jurisdictions.

On a consolidated basis, revenues from foreign countries were approximately $1.5 billion, or approximately 67% of total revenues, for the year ended December 31, 2024.

In many countries, the laws and rules and regulations applicable to the financial services industry are uncertain and evolving, and it may be difficult for us to determine the exact requirements of local regulations in every jurisdiction.

Our inability to remain in compliance with local laws and rules and regulations in a particular foreign jurisdiction could have a significant and negative effect not only on our business in that market but also on our reputation generally.

In many countries, the laws, rules and regulations applicable to the financial services industry are uncertain and evolving, and it may be difficult for us to determine the exact requirements of local regulations in every jurisdiction.

Our inability to remain in compliance with local laws, rules and regulations in a particular foreign jurisdiction could have a significant and negative effect not only on our business in that market, but on our reputation generally.

If we are unable to manage any of these risks effectively, our business, financial condition, results of operations and prospects could be adversely affected.

Our international activities are subject to a number of laws generally, including laws that prohibit corruption, anti-bribery laws, import and export control law, and economic and trade sanctions programs.

We may not be successful in complying with these laws in all situations and violations may result in material monetary fines, penalties, and other costs or sanctions against us.

There are also certain additional political, economic, legal, operational, and other risks inherent in doing business in international financial markets, particularly in the regulated financial services industry.

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This is sometimes referred to as “systemic risk” and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which we transact on a regular basis, and therefore could adversely affect us.

Similarly, our vendors, including insurance companies and

other providers, are subject to normal business risks as well as risks related to changes in U.S.

Similarly, our vendors, including insurance companies and other providers, are subject to normal business risks as well as risks related to changes in U.S.

and international economic and market conditions.

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In agency transactions, we charge a commission for connecting buyers and sellers and assisting in the negotiation of the price and other material terms of the transaction.

After all material terms of a transaction are agreed upon, we identify the

buyer and seller to each other and leave them to settle the trade directly.

After all material terms of a transaction are agreed upon, we identify the buyer and seller to each other and leave them to settle the trade directly.

We are exposed to credit risk for commissions, as we bill customers for our agency brokerage services.

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Concentration and Market Risk

The rates business is our largest product category, and we could be significantly affected by any downturn in the rates product market.

The rates business is and has historically been our largest product category, and we could be significantly affected by any downturn in the rates product market.

We offer our brokerage services in five broad product categories:

Rates, Credit, FX, Energy and Commodities, and Equities.

Our brokerage revenues are strongest in our Rates asset class, which accounted for approximately 33.3% of our total brokerage revenues on a consolidated basis for the year ended December 31, 2023.

While we focus on expanding and have successfully diversified our product offerings, we may currently be exposed to any adverse change or condition affecting the interest rates market.

Our brokerage revenues are and have been historically largest in our Rates asset class, which accounted for approximately 33.7% of our total brokerage revenues on a consolidated basis for the year ended December 31, 2024.

While we focus on expanding and have successfully diversified our product offerings, including through recent acquisitions in our Energy, Commodities, and Shipping business, we may currently be exposed to any adverse change or condition affecting the interest rates market.

Accordingly, the concentration of our brokerage business on rates products subjects our results to a greater market risk than if we had more diversified product offerings.

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We negotiate from time to time with certain customers (including many of our largest customers) to enter into customized volume discount pricing plans.

While the pricing plans are designed to encourage customers to be more active on our Fully Electronic trade execution platform, they reduce the amount of commissions and fees payable to us by certain of our most active customers for certain products, which could reduce our revenues and constrain our profitability.

While the pricing plans are designed to encourage customers to drive higher volumes across our business and to be more active on our Fully Electronic trade execution platform, they reduce the amount of commissions and fees payable to us by certain of our most active customers for certain products, which could reduce our revenues and constrain our profitability.

From time to time, these pricing plans come up for renewal.

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Computer-generated buy/sell programs and other technological advances, including AI, and regulatory changes in the marketplace may continue to tighten securities spreads.

In addition, new and enhanced alternative trading systems, such as

electronic communications networks, have emerged as alternatives for individual and institutional investors, as well as brokerage firms.

In addition, new and enhanced alternative trading systems, such as electronic communications networks, have emerged as alternatives for individual and institutional investors, as well as brokerage firms.

As such systems do not direct trades through market makers, their use could result in reduced revenues for us or for our customers.

In addition, reduced trading levels could lead to lower revenues which could materially adversely affect our businesses, financial condition, results of operations and prospects.

We have market risk exposure from unmatched principal transactions entered into by some of our desks, as well as holdings of marketable equity securities, which could result in losses and have that could have a material adverse effect on our business, financial condition, results of operations, and prospects for any particular reporting period.

We have market risk exposure from unmatched principal transactions entered into by some of our desks, which could result in losses that could have a material adverse effect on our business, financial condition, results of operations, and prospects for any particular reporting period.

In addition, financial fraud or unauthorized trading activity could also adversely impact our business, financial condition, results of operations and prospects.

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Our exposure varies based on the size of the overall position, the terms and liquidity of the instruments brokered and the amount of time the position is held before we dispose of the position.

Although we have limited ability to track our exposure to market risk and unmatched positions on an intra-day basis, we attempt to mitigate market risk on these positions by strict risk limits, extremely limited holding periods and active risk management, including hedging our exposure.

Although we have limited ability to track our exposure to market risk and unmatched positions on an intra-day basis, we attempt to mitigate market risk on these positions by imposing strict risk limits, extremely limited holding periods and active risk management, including hedging our exposure.

These positions are intended to be held short term, and generally to facilitate customer transactions.

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In addition, certain affiliated entities are subject to regulation by the CFTC, including CF&Co and BGC Financial.

In certain products we, CF&Co, BGC Financial and other affiliates act in a matched principal or principal capacity in markets by posting and/or acting upon quotes for our account.

Such activity is intended, among other things, to assist us, CF&Co, and other affiliates in managing proprietary positions (including, but not limited to, those established as a result of combination trades and errors), facilitating transactions, framing markets, adding liquidity, increasing commissions and attracting order flow.

In certain products, we, BGC Financial and other affiliates act in a matched principal or principal capacity in markets by posting and/or acting upon quotes for our account.

Such activity is intended, among other things, to assist us and other affiliates in managing proprietary positions (including, but not limited to, those established as a result of combination trades and errors), facilitating transactions, framing markets, adding liquidity, increasing commissions and attracting order flow.

From a risk management perspective, we monitor risk daily, on an end-of-day basis, and desk managers generally monitor such exposure on a continuous basis.

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Any principal losses and gains resulting from these positions could on occasion have disproportionate effects, negative or positive, on our business, financial condition, results of operations and prospects for any particular reporting period.

In addition, in recent years we have had considerable holdings of marketable securities received by us as consideration for the sale of certain businesses.

In addition, in recent years we have had and may again have considerable holdings of marketable securities received by us as consideration for the sale of certain businesses.

We may seek to manage the market risk exposure inherent in such holdings by minimizing the effect of price changes on a portion of such holdings, including through the use of derivative contracts.

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The holders of our Class A common stock and Class B common stock have substantially identical rights, except that holders of Class A common stock are entitled to one vote per share, while holders of Class B common stock are entitled to 10 votes per share on all matters to be voted on by stockholders in general.

As of December 31, 2023, Cantor (including CFGM) beneficially owned 96.3 million shares of our Class B common stock, representing 88.0% of our outstanding Class B common stock and approximately 64.8% of our total voting power.

As of December 31, 2023, Mr.

Lutnick and individuals related to Mr.

Lutnick owned 13.1 million shares of our outstanding Class B common stock, representing 12.0% of the outstanding shares of BGC Class B common stock and approximately 8.9% of our total voting power.

Together, Cantor, CFGM, Mr.

Lutnick and individuals related to Mr.

Lutnick own 100% of the outstanding shares of BGC Class B common stock and approximately 73.7% of our total voting power.

As long as Cantor beneficially owns a majority of our total voting power, it will have the ability, without the consent of the public holders of our Class A common stock, to elect all of the members of our Board and to control our management and affairs.

As long as Cantor beneficially owns a majority of our total voting power, it will have the ability, without the consent of the other holders of our Class A common stock, to elect all of the members of our Board and to control our management and affairs.

In addition, it will be able to determine the outcome of matters submitted to a vote of our stockholders for approval and will be able to cause or prevent a change of control of us.

In certain circumstances, such as when transferred to an entity controlled by Cantor or Mr.

Lutnick, the shares of our Class B common stock issued to Cantor may be transferred without conversion to our Class A common stock.

In certain circumstances, such as when transferred to an entity controlled by Cantor and/or the Lutnick Family, the shares of our Class B common stock issued to Cantor may be transferred without conversion to our Class A common stock.

BGC Class B common stock is controlled by Cantor and is not subject to conversion or termination by our Board or any committee thereof, or any other stockholder or third party.

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We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our Class A stockholders.

Some provisions of the DGCL, our restated certificate of incorporation, and our amended and restated bylaws could make the following more difficult:

Some provisions of the DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws could make the following more difficult:

• acquisition of us by means of a tender offer;

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These provisions may also encourage persons seeking to acquire control of us to first negotiate with our Board.

We believe that the

benefits of increased protection give us the potential ability to negotiate with the initiator of an unfriendly or unsolicited proposal to acquire or restructure us and outweigh the disadvantages of discouraging those proposals because negotiation of them could result in an improvement of their terms.

Our bylaws provide that special meetings of stockholders may be called only by the Chairman of our Board, or in the event the Chairman of our Board is unavailable, by the Chief Executive Officer or by the holders of a majority of the voting power of our Class B common stock, which is held by Cantor.

We believe that the benefits of increased protection give us the potential ability to negotiate with the initiator of an unfriendly or unsolicited proposal to acquire or restructure us and outweigh the disadvantages of discouraging those proposals because negotiation of them could result in an improvement of their terms.

Our bylaws provide that special meetings of stockholders may be called only by the Chairman of our Board, or in the event the Chairman of our Board is unavailable, by any Chief Executive Officer or by the holders of a majority of the voting power of our Class B common stock, which is held by Cantor.

In addition, our restated certificate of incorporation permits us to issue “blank check” preferred stock.

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The requirement that this approval be obtained may prevent or delay transactions that would result in a change of control.

Further, our Equity Plan and certain of the awards under our Equity Plan contain provisions pursuant to which grants that are unexercisable or unvested may automatically become exercisable or vested as of the date immediately prior to certain change of control events.

Further, certain of the awards under the BGC Group Equity Plan contain provisions pursuant to which grants that are unexercisable or unvested may automatically become exercisable or vested as of the date immediately prior to certain change of control events.

Additionally, change in control and employment agreements between us and our named executive officers also provide for certain grants, payments, and grants of exchangeability, and exercisability in the event of certain change of control events.

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Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock.

We are a holding company, and accordingly we are dependent upon distributions from BGC U.S.

OpCo and BGC Global OpCo to pay dividends, taxes and indebtedness and other expenses and to make repurchases.

We are a holding company and, accordingly are dependent upon distributions from BGC U.S.

OpCo and BGC Global OpCo to pay dividends, taxes and indebtedness and other expenses and to make repurchases of our Class A common stock.

There can be no assurance that future dividends will be paid, that dividend amounts will be maintained or that repurchases will be made at current or future levels.

We are a holding company with no direct operations and will be able to pay dividends, taxes and other expenses, and to make repurchases of shares our Class A common stock or other equity interests in us or in our subsidiaries, only from our available cash on hand and funds received from distributions, loans or other payments, from our operating subsidiaries.

As discussed above, regulatory, tax restrictions or elections, and other legal or contractual restrictions may limit our ability to transfer funds freely from our subsidiaries.

In addition, any unanticipated accounting, tax or other charges against net income could adversely affect our ability to pay dividends and to make repurchases.

Beginning in the first quarter of 2020, and for all of the quarterly periods following, the Board reduced the quarterly dividend to $0.01 per share out of an abundance of caution in order to strengthen the Company’s balance sheet as the global capital markets faced difficult and unprecedented macroeconomic conditions related to the global pandemic.

At present, we plan to prioritize share repurchases over dividends and distributions.

In addition, any unanticipated accounting, tax or other charges against net income could adversely affect our ability to pay dividends and to make repurchases of our Class A common stock.

While our quarterly dividends paid per share increased by $0.01 per share in 2024, we plan to continue to prioritize share repurchases over dividends and distributions.

The Inflation Reduction Act of 2022 provides for a new U.S.

federal 1% excise tax on stock repurchases, which is effective January 1, 2023.

federal 1% excise tax on stock repurchases, which has been in effect since January 1, 2023.

We continue to analyze the impacts of the IR Act and related regulatory developments.

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Our Board and our Audit Committee have authorized repurchases of shares of BGC Class A common stock or other equity interests in us or in subsidiaries, from Cantor, our executive officers, other employees, and others.

On July 3, 2023, the BGC Group Board and Audit Committee approved our share repurchase authorization in an amount up to $400.0 million, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities.

On October 30, 2024, the BGC Group Board and Audit Committee re-authorized our share repurchase authorization in an amount up to $400.0 million, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities.

As of December 31, 2024, we had approximately $350.0 million remaining under this authorization and may continue to actively make repurchases or purchases, or cease to make such repurchases or purchases, from time to time.

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Therefore, if we became subject to the Investment Company Act, it could make it impractical to continue our business in this structure, impair agreements and arrangements, and impair the transactions contemplated by those agreements and arrangements, between and among us and our operating subsidiaries, or any combination thereof, and materially adversely affect our business, financial condition, results of operations, and prospects.

The expected benefits of the Corporate Conversion may not be obtained.

On July 1, 2023, we completed our Corporate Conversion to a Full C Corporation in order to simplify the corporate structure of our business.

We believe that, following the Corporate Conversion Transactions, the organizational structure of the BGC businesses has become more comprehensible to the marketplace, which may, in turn, increase demand for our shares and assist in the goal of maximizing long-term stockholder value.

By simplifying the organizational structure, the Corporate Conversion may improve stockholder value by reducing administrative costs and increasing the efficiency of our regulated businesses and associated capital requirements.

However, it is possible that these expected benefits will not be achieved.

There can be no assurance that our brokers and other employees, the rating agencies, our lenders, our bondholders, our investors, our counterparties, our clients, or others will view our new structure favorably, or that the new structure will have the expected impact on our GAAP or non-GAAP results, cash position, cash or non-cash accounting charges, tax rate, or other factors.

Any of these factors or others could negatively affect our business, financial condition, results of operations and prospects.

Changes to our equity-based compensation structure as a result of the Corporate Conversion may adversely affect our ability to recruit, retain, compensate and motivate some employees.

While we believe that our emphasis on equity-based compensation promotes recruitment, motivation of our brokers and other employees and alignment of interest with stockholders, such employee may be more attracted to the benefits of working at a public company with a different compensation structure than our own, which may adversely affect our ability to recruit, retain, compensate and motivate these persons.

Following the Corporate Conversion, our employees now receive equity-based compensation at BGC Group, the new public entity.

In addition, the equity-based compensation structure following the Corporate Conversion no longer has certain other benefits of BGC Holding’s partnership structure, including certain duties that were owed by, and post-employment restrictive covenants that were applicable to, the limited partners in BGC Holdings.

Risks Related to Our Relationship with Cantor and its Affiliates

We are controlled by Cantor and Mr.

Lutnick, who have potential conflicts of interest with us and may exercise their control in a way that favors their interests to our detriment.

Cantor, and Mr.

Lutnick, indirectly through his control of Cantor, are each able to exercise control over our management and affairs and all matters requiring stockholder approval, including the election of our directors and determinations with respect to acquisitions and dispositions, as well as material expansions or contractions of our business, entry into new lines of business and borrowings and issuances of our Class A common stock and Class B common stock or other securities.

In connection with his confirmation as the 41st Secretary of Commerce, Howard Lutnick has stated his intention to divest his interests in our company to comply with U.S.

government ethics rules.

We cannot predict the consequences of this divestiture.

In addition to the risks described under “—Risks Relating to Our Key Personnel and Employee Turnover,” there are various risks associated with Howard Lutnick’s intended upcoming divestment of his interests in our company, Cantor and CFGM.

The consequences of these divestments will depend upon the manner in which they are accomplished, and we do not currently expect such divestments to trigger “change of control” provisions under any material agreements.

That expectation may change and it may be difficult to predict the full consequences of such divestments, and there can be no assurance that these divestments will not trigger such “change of control” provisions.

Our Class B common stock is held by Cantor and CFGM, whose interests may conflict with ours and may exercise their control in a way that favors their interests to our detriment.

Since our inception, we have been controlled directly by Cantor, and indirectly by Howard Lutnick through his control of Cantor.

Cantor exercises control over our management and affairs and all matters requiring stockholder approval, including the election of our directors and determinations with respect to acquisitions and dispositions, as well as material expansions or contractions of our business, entry into new lines of business and borrowings and issuances of our Class A common stock and Class B common stock or other securities.

This control is subject to the approval of our Audit Committee on those matters requiring such approval.

Cantor’s voting power may also have the effect of delaying or preventing a change of control of us.

Following the Corporate Conversion, Cantor’s beneficial ownership increased as a result of the Corporate Conversion Transactions, including its exchange of its BGC Holdings limited partnership units into our Class B common stock.

Further changes in Cantor’s management may occur pursuant to Howard Lutnick’s divestiture of his interests, which may impact Cantor’s control over and relationship with us in ways that we cannot currently predict.

As of December 31, 2024, Cantor (including CFGM) beneficially owned 96.3 million shares of our Class B common stock, representing 88% of our outstanding Class B common stock and approximately 65.6% of our total voting power.

As of December 31, 2023, Mr.

Lutnick and individuals related to Mr.

Lutnick owned 13.1 million shares of our outstanding Class B common stock, representing 12.0% of the outstanding shares of BGC Class B common stock and approximately 8.9% of our total voting power.

Together, Cantor, CFGM, Mr.

Lutnick and individuals related to Mr.

Lutnick own 100% of the outstanding shares of BGC Class B common stock and approximately 73.7% of our total voting power.

Cantor’s and Mr.

Lutnick’s ability to exercise control over us could create or appear to create potential conflicts of interest.

As of December 31, 2024, Howard Lutnick and individuals related to him (the “Lutnick Family”) owned 13.1 million shares of our outstanding Class B common stock, representing 12% of the outstanding shares of BGC Class B common stock and approximately 8.9% of our total voting power.

Together, as of December 31, 2024, Cantor, CFGM, Howard Lutnick and individuals related to him owned 100.0% of the outstanding shares of BGC Class B common stock and approximately 75.8% of our total voting power.

Additionally, on February 18, 2025, Brandon Lutnick was appointed as Chief Executive Officer and Chairman of Cantor, as Chief Executive Officer of CFGM, and as a member of our Board of Directors, and Kyle Lutnick was appointed as Executive Vice Chairman of Cantor and President of CFGM.

Cantor’s and/or members of the Lutnick Family’s ability to exercise control over us could create or appear to create potential conflicts of interest.

Conflicts of interest may arise between us and Cantor in a number of areas relating to our past and ongoing relationships, including:

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• provision of clearing capital pursuant to the Clearing Agreement and potential and existing loan arrangements;

• any positions by members of the Lutnick Family’s with us and our affiliates, Newmark Group and/or Cantor and their ownership of any such equity or the equity of any of Cantor’s other affiliates.

Potential conflicts of interest could also arise if we decide to enter into any new commercial arrangements with Cantor in the future or in connection with Cantor’s desire to enter into new commercial arrangements with third parties.

We also expect Cantor to manage its ownership of us so that it will not be deemed to be an investment company under the Investment Company Act, including by maintaining its voting power in us above a majority absent an applicable exemption from the Investment Company Act.

Further, potential allegations of conflicts or reputational impacts could occur, which may have an adverse effect on our business.

Members of the Lutnick family have been, and may be, periodically employed by and/or involved in the management of our and our affiliate’s businesses.

We expect Cantor to manage its continued ownership of us so that it will not be deemed to be an investment company under the Investment Company Act, including by maintaining its voting power in us above a majority absent an applicable exemption from the Investment Company Act.

This may result in conflicts with us, including those relating to acquisitions or offerings by us involving issuances of shares of our Class A common stock, or securities convertible or exchangeable into shares of our Class A common stock, which would dilute Cantor’s voting power in us.

See “–General Risks—If we or Newmark Holdings were deemed an “investment company” under the Investment Company Act, the Investment Company Act’s restrictions could make it impractical for us to continue our business.”

See “–General Risks—If we were deemed an “investment company” under the Investment Company Act, the Investment Company Act’s restrictions could make it impractical for us to continue our business.”

In addition, Cantor has from time to time in the past and may in the future consider possible strategic realignments of its own business and/or of the relationships that exist between and among Cantor and its other affiliates and us.

Any related-party transaction or arrangement between Cantor and its other affiliates and us is subject to the prior approval by our Audit Committee, but generally does not otherwise require the separate approval of our stockholders, and if such stockholder approval is required, Cantor may retain sufficient voting power to provide any such requisite approval without the affirmative consent of the other stockholders.

There is no assurance that such consolidation or restructuring would not result in a material expense or disruption to our business.

Moreover, the service of officers or partners of Cantor as our executive officers and directors, and those persons’ ownership interests in and payments from Cantor and its affiliates, SPACs and similar investments or other entities, could create conflicts of interest when we and those directors or executive officers are faced with decisions that could have different implications for us and them.

The ability of certain key employees to devote adequate time and attention to us are critical to the success of our business, and failure to do so may adversely affect our business, financial condition, results of operations and prospects.

Any related-party transaction or arrangement between Cantor and its other affiliates and us is subject to the prior approval by our Audit Committee, but generally does not require the separate approval of our stockholders, and if such stockholder approval is required, Cantor may retain sufficient voting power to provide any such requisite approval without the affirmative consent of our other stockholders.

There is no assurance that such restructuring would not result in a material expense or disruption to our business.

Our agreements and other arrangements with Newmark and Cantor may be amended upon agreement of the parties to those agreements and approval of our Audit Committee.

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To address potential conflicts of interest between Cantor and its representatives and us, our restated certificate of incorporation contains provisions regulating and defining the conduct of our affairs as they may involve Cantor and its representatives, and our powers, rights, duties and liabilities and those of our representatives in connection with our relationship with Cantor and its affiliates, officers, directors, general partners or employees.

Our restated certificate of incorporation provides that no Cantor Company, as defined in our restated certificate of incorporation, or any of the representatives, as defined in our restated certificate of incorporation, of a Cantor Company will owe any fiduciary duty to, nor will any Cantor Company or any of their respective representatives be liable for breach of fiduciary duty to, us or any of our stockholders,

including with respect to corporate opportunities.

In addition, Cantor and its respective representatives have no duty to refrain from engaging in the same or similar activities or lines of business as us or doing business with any of our customers.

The corporate opportunity policy that is included in our restated certificate of incorporation is designed to resolve potential conflicts of interest between us and Cantor and its representatives.

If any Cantor Company or any its representatives acquires knowledge of a potential transaction or matter that may be a corporate opportunity (as defined in our restated certificate of incorporation) for any such person, on the one hand, and us or any of our representatives, on the other hand, such person will have no duty to communicate or offer such corporate opportunity to us or any of our representatives, and will not be liable to us, any of our stockholders or any of our representatives for breach of any fiduciary duty by reason of the fact that they pursue or acquire such corporate opportunity for themselves, direct such corporate opportunity to another person or do not present such corporate opportunity to us or any of our representatives, subject to the requirement described in the following sentence.

If any Cantor Company or any of its representatives acquires knowledge of a potential transaction or matter that may be a corporate opportunity (as defined in our restated certificate of incorporation) for any such person, on the one hand, and us or any of our representatives, on the other hand, such person will have no duty to communicate or offer such corporate opportunity to us or any of our representatives, and will not be liable to us, any of our stockholders or any of our representatives for breach of any fiduciary duty by reason of the fact that they pursue or acquire such corporate opportunity for themselves, direct such corporate opportunity to another person or do not present such corporate opportunity to us or any of our representatives, subject to the requirement described in the following sentence.

If a third party presents a corporate opportunity to a person who is both our representative and a representative of a Cantor Company, expressly and solely in such person’s capacity as our representative, and such person acts in good faith in a manner consistent with the policy that such corporate opportunity belongs to us, then such person will be deemed to have fully satisfied and fulfilled any fiduciary duty that such person has to us as our representative with respect to such corporate opportunity, provided that any Cantor Company or any of its representatives may pursue such corporate opportunity if we decide not to pursue such corporate opportunity.

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Our relationship with Cantor and/or its affiliates may result in agreements with Cantor and/or its affiliates that are between related parties.

For example, we provide to and receive from Cantor an/or its affiliates various administrative services, including investment banking services.

For example, we provide to and receive from Cantor and/or its affiliates various administrative services, including investment banking services.

As a result, the prices charged to us or by us for services provided under any agreements with such entities may be higher or lower than prices that may be charged by third parties, and the terms of these agreements may be less favorable to us than those that we could have negotiated with third parties.

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2024-0146-LWW.

Defendants moved to dismiss the case and argument on that motion was heard on January 9, 2025, with a decision from the court expected in the coming months.

While the lawsuit is in its early stages and does not name the Company as a party, the Company believes the action lacks merit.

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Purchasers of our Class A common stock, as well as existing stockholders, may experience significant dilution as a result of offerings of shares of our Class A common stock by us, and the perception that such sales could occur may adversely affect prevailing market prices for our stock.

We have an effective registration statement on Form S-3 filed and a Controlled Equity Offering SM sales agreement with CF&Co with respect to the offer and sale of up to 300.0 million shares of BGC Class A common stock from time to time on a delayed or continuous basis pursuant to a CEO program.

We may sell shares of our Class A common stock from time to time.

As a well-known seasoned issuer, we may file an automatic shelf registration statement and commence a registered offering, including of our Class A common stock, immediately thereafter.

We have an effective registration statement on Form S-3 filed and a Controlled Equity Offering SM sales agreement with CF&C o w ith respect to the offer and sale of up to 300.0 million shares of BGC Class A common stock from time to time on a delayed or continuous basis pursuant to a CEO program.

As of December 31, 2024, we have not issued any shares of BGC Class A common stock under the current CEO Program.

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As of December 31, 2024, we have issued 0.8 million shares of BGC Class A common stock under the DRIP.

We have filed a number of registration statements on Form S-8 pursuant to which we have registered the shares underlying our Equity Plan.

We have filed a number of registration statements on Form S-8 pursuant to which we have registered the shares underlying the BGC Group Equity Plan.

As of December 31, 2024, there were 440.8 million shares remaining for sale under such registration statements.

Our management will have broad discretion as to the timing and amount of sales of our Class A common stock in any offering by us, as well as the application of the net proceeds of any such sale.

Our management will have broad discretion as to the timing and amount of sales of our Class A common stock in any offering by us, as well as the application of the net proceeds of any such sales.

Accordingly, purchasers in any such offering will be relying on the judgment of our management with regard to the use of such net proceeds, and purchasers will not have the opportunity, as part of their investment decision, to assess whether the proceeds are being used appropriately.

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Purchasers of these shares may suffer significant dilution if the price they pay is higher than the price paid by other purchasers of shares of our Class A common stock in any future offerings of shares of our Class A common stock.

In addition, the sale by us of any shares of our Class A common stock will decrease our existing Class A common stockholders’ proportionate ownership interest in us, reduce the amount of cash available per share for dividends payable on shares of our Class A common stock and diminish the relative voting strength of each previously outstanding share of our Class A common stock.

In addition, the sale by us of any shares of our Class A common stock may decrease our existing Class A common stockholders’ proportionate ownership interest in us, reduce the amount of cash available per share for dividends payable on shares of our Class A common stock and diminish the relative voting strength of each previously outstanding share of our Class A common stock.

We may use the net proceeds from future offerings of our Class A common stock to repurchase shares from Cantor, our executive officers, other employees and others, which may render the proceeds unavailable for other purposes.

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From January 1, 2024 to December 31, 2024, we repurchased an aggregate of 31.6 million shares of our Class A common stock at an aggregate purchase price of approximately $261.9 million, with a weighted-average repurchase price of $8.30 per share.

From January 1, 2023 to the closing of the Corporate Conversion, we redeemed for cash an aggregate of 0.3 million limited partnership units at a weighted average price of $4.71 per unit and an aggregate of 0.2 million FPUs at a weighted average price of $5.11 per unit.

In the future, we may continue to repurchase shares of our Class A common stock from Cantor, our executive officers, other employees, and others, and these repurchases may be significant.

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General Risks

Our operations are global and exchange rate fluctuations and international market events could materially adversely impact our business, financial condition, results of operations and prospects.

Our operations are global and exchange rate fluctuations and international market events could materially and adversely impact our business, financial condition, results of operations and prospects.

Because our operations are global, we are exposed to risks associated with changes in FX rates.

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In addition, changes in the remeasurement of our foreign currency denominated net assets are recorded as part of our results of operations and fluctuate with changes in foreign currency rates.

We monitor our net exposure in foreign currencies on a daily basis and hedge our exposure as deemed appropriate with major financial institutions.

We monitor our net exposure to foreign currencies on a daily basis and we may hedge our exposure as deemed appropriate with major financial institutions.

However, potential movements in the U.S.

dollar against other currencies in which we earn revenues have in the past and may in the future materially adversely affect our financial results.

dollar against other currencies in which we earn revenues have in the past and may in the future materially and adversely affect our financial results.

Furthermore, our revenues derived from non-U.S.

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moreover, misconduct is difficult to detect and deter, and error is difficult to prevent.

Employee errors and miscommunication, including mistakes in executing, recording or processing transactions for customers, could cause us to suffer liability, loss, sanction and/or reputational harm, which could expose us to the risk of material losses even if the errors and miscommunication are detected and the transactions are unwound or reversed.

If our customers are not able to settle their transactions on a timely basis, the time in which employee errors and miscommunication are detected may be increased and our risk of material loss could be increased.

Employee error and miscommunication, including mistakes in executing, recording or processing transactions for customers, could cause us to suffer liability, loss, sanction and/or reputational harm, which could expose us to the risk of material losses even if the error and miscommunication are detected and the transactions are unwound or reversed.

If our customers are not able to settle their transactions on a timely basis, the time in which employee error and miscommunication are detected may be increased and our risk of material loss could be increased.

The risk of employee error and miscommunication may be greater for products or services that are new or have non-standardized terms.

Ongoing scrutiny and changing expectations from stockholders with respect to the Company’s corporate responsibility or ESG practices may result in additional costs or risks.

Ongoing scrutiny and changing expectations from stockholders, clients and customers with respect to the Company’s corporate responsibility or ESG practices may result in additional costs or risks.

Companies across our industry are facing continuing scrutiny related to their corporate responsibility or ESG practices and related demographic disclosures.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors